Dorwin "Trey" Sargent

A common question clients ask after being sued is, “What could I have done differently to have avoided a lawsuit?”

At the outset of a lawsuit, a careful plaintiff will consider the answer to three questions:

  1. Can I prove the Defendant is liable? – Simply put, was the Defendant in the wrong? It could be that a contract was breached, a trespass occurred on a piece of land, or a car was negligently driven.
  2. Can I prove Damages? – Think of damages as an effect of a wrongdoing. It could mean lost income due to a breach of contract, a destroyed fence from a trespass, or a damaged vehicle from an accident. Should a plaintiff win a lawsuit, these effects will be expressed as a dollar figure. For a successful plaintiff, the result of the lawsuit will be a judgment against a defendant for a dollar amount.
  3. Can I collect a judgment?   Collectability is a huge issue in Texas. Because of Texas generous homestead protections Plaintiffs can have a tough time getting at the assets of a Defendant.

Things you can do to protect yourself.

Business Owners- A simple step that provides protection from personal liability is the creation of an entity. LLCs, Corporations, Limited Partnerships, and other entities afford different levels of protection, and can help dissuade would-be plaintiffs from bringing a lawsuit.

For already incorporated entities, our business attorneys can help you develop strategies to minimize your risk. Since each business is different, contacting an attorney to discuss the unique aspects of your business would be your best option at minimizing your risk.

Individuals – Invest in protected accounts. Under Texas Homestead Law, your retirement assets held in 401k and IRA accounts are protected from seizure. Likewise, Health Savings Account and Flexible Spending Accounts are protected. On the other hand, traditional checking, savings, and investment accounts receive no protection under Homestead Law.

Plan ahead! For businesses and individuals alike, early planning is the best tool to protect assets. Once a dispute arises, the legal options for taking steps to protect your assets are dramatically reduced. Contact our firm today to learn how we can minimize your risk and protect your assets and/or business.